Question
Use the following three methods to determine if you will purchase this stock at current market price. Assume market interest rate (r) as 12%, constant
Use the following three methods to determine if you will purchase this stock at current market price. Assume market interest rate (r) as 12%, constant dividend growth rate (g) as 10%, and industry average P/E ratio as 20 times
(1) True value method (Gordon dividend valuation model )
(2) Annual rate of return method (Gordon dividend valuation model)
(3) P/E multiples approach
3. If you purchased this stock at 52 week range low, sold it at current market price, and you also received dividend during this holding period; calculate holding period rate of return
Atclose:04:00pMEST182.4512.41(6.37%)Afterhours:07:59PMEST182.50+0.05(+0.03%) Atclose:04:00pMEST182.4512.41(6.37%)Afterhours:07:59PMEST182.50+0.05(+0.03%)Step by Step Solution
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